When the time comes to purchase your home, one of the most important aspects of the process is choosing a lender or bank that offers you exactly what is right for you through an affoardable home loan and what mathes with your own circumstances.
There are many different lenders promising to offer you the best rates and the best deals but often, it can prove to be difficult to make the right decisions in absence of perfect understanding of the product and its consequences. Therefore, this guide is aimed at helping you to choose the right home loan in your city.
Consider the Interest Rate
When it comes to selecting an affoardable home loan, you need to consider the interest rate although the cheapest rate is not always the best option. Therefore, compare lenders and find a rate that is competitive while ensuring that all other aspects of the loan fit your needs. Check if there will be penanlties for making offset or additional payments.
Look at all Lenders
From the moment you begin looking for an affoardable home loan, you will realise that there are many lenders offering you the best deal. Therefore, you should look at all lenders and compare their deals. Look at the interest rate, the tenure, early repayment charges and all other aspects that can really make or break a home loan offer. Do not just enquire one lender and go with their product in absence of a review of all the market.
Additional Reading: Home Loans in Pakistan- Tips for Planning Your Monthly Installment
Check the Home Loan Requirements
Before you compare and apply for an affoardable home loan, you need to make sure that you meet the specific criteria that lenders set. This can differ considerably from one lender to another but it will include where you want to buy a home, city, location or society, your age, monthly income, current liabilities, financial history, and your credit rating history as how you have been paying back any loans in past (if any).
Variable Rate or Fixed Rate
A variable rate can change during the tenure of the home loan while a fixed rate will not change. Variable rate also depends on the KIBOR rate (Karachi Interbank Offered Rate). Determine the amount of interest you will be paying with both rates, whether you can afford the rate to fluctuate as well as the costs of paying off a fixed rate home loan early.
Hidden Costs and Charges
Many home loans will come with hidden charges as lenders look at ways of penalising you for many different things. There are charges such as processing fees, early payment fees as well as valuation fees, all of which can give you a nasty surprise. You must establish all such charges well before in time to get an affoardable home loan in Pakistan.
Make Credit Card or Loan Payments on Time
Always make your credit card or any other loan payments on time as it establishes your credit score with the Lenders. Your credit score is considered to be extremely important by lenders because it tells them whether you are a reliable borrower who is likely to meet all repayments. If you have a low credit score then you might find it difficult to obtain a home loan. Therefore, take a look at your credit report online and if you find out that it is low, you can begin to put measures in place that can help you to increase the score and help you obtain your home loan. However, if you do have a low credit score and are accepted for a home loan, you will more than likely find that you will pay a higher rate of interest.
The Terms and Conditions are Important
If you fail to read the terms and conditions, you will be entering an agreement with your lender with no prior knowledge and that could result in you experiencing problems later down the line. Make sure you consult with your legal representative and family members before commitment to a home loan which is a long term financial commitment.
Comparing is Crucial
The great thing about looking for a lender is that you can easily compare all lenders in one go. Using Mawazna.com Home Loan Comparison Platform that enables you to seek out a home loan matching with your specific needs in just a matter of minutes. The ability to compare prices ensures that you make the correct decision and don’t pay more than you should. Comparing prices is simple and effective but will really help you to make an informed decision.